US to achieve cost parity with China by 2015

05/07/2013

In another sign that America is becoming increasingly competitive in manufacturing, the United States is now equal to Mexico in "attractiveness" as a location for manufacturing operations and is on track to achieve cost parity with manufactured imports from China by 2015.

However, before companies set up or move production from formerly favored locales, including China, they need to perform thorough, case-by-case analyses as a number of critical factors -- including product type, location, transportation and other variables -- can greatly impact attractiveness and cost-effectiveness. This is according to new research, including a survey of 137 C-level manufacturing-company executives and an in-depth economic and cost analysis, released today by global business advisory firm AlixPartners (New York).

In the AlixPartners survey, 37% of manufacturing executives said they would choose the US as their preferred location for nearshoring (defined as moving production of products closer to the US consumer base). While an equal percentage of respondents cited Mexico as the most attractive nearshoring locale, the U.S. continues to post impressive gains versus perceptions of just a few years ago. In a similar AlixPartners survey last year, 49% of executives said they would choose Mexico, while 36% said they would choose the US. In the firm's survey just two years ago, 63% chose Mexico, while only 19% said they would choose the US.
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